17 October 2013 19:32 [Source: ICIS news]
HOUSTON (ICIS)--The US dollar will soon enter “a multi-year uptrend” thanks to economic growth and higher real yields that ultimately will improve its value against the euro, a global investment bank said on Thursday in a research note.
Deutsche Bank forecasts the dollar exchange rate with the euro to improve to €0.80 by year’s end and €0.85 within 12 months.
The current exchange rate is $1 equals to €0.74.
The median US chemicals producer sells 26% of its products to Europe, Deutsche Bank pointed out, so changes in the exchange rate can have a significant effect on earnings.
The investment bank forecasts continued demand weakness from Europe amid a greater upside risk to growth to the continent’s economies.
Meanwhile, the US Federal Reserve will likely begin tapering its quantitative easing policy of purchasing $85bn/month in asset purchases before the end of 2013, Deutsche Bank said, and then end the programme in 2014 as monetary policy becomes more hawkish as the US economy accelerates.
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